Earlier this month, NCLT barred Essel Group chairman Subhash Chandra from selling his assets, while the tribunal examines a proposed repayment plan involving admitted claims of about ₹22,006 cr against his personal guarantees. The proposed repayment is reportedly of ₹6.5 cr. The numbers are rather baffling. At one point, Chandra and the promoter group held about 42% of Zee Entertainment. Today, that holding is a mere 4%.
A significant part of Essel's expansion beyond media over the years to businesses like roads, solar and packaging was funded by borrowing against Zee shares. Banks, NBFCs and MFs lent against pledged shares, with personal guarantees from Chandra providing an additional layer of security. The structure worked well as long as two things were in place: a healthy Zee share price, and seamless access to refinancing.
